Self Storage Prime Group Holdings Buying 511 West 24th Street

Self-storage investor Robert Moser is buying a deeply discounted West Chelsea office building to operate as a storage and office property.

Moser’s Prime Group Holdings is in contract to buy the three connected office buildings at 511-541 West 25th Street, known as the Ironworks, for $50 million, The Real Deal has learned. That’s about a third of the $148 million that sellers Artemis Real Estate Partners and L&L Holding paid for the property in 2019.

Moser has teamed up with Josh Rahmani and Eli Khalili’s Empire Capital Holdings on the deal. They plan a mix of self-storage and traditional office space, according to a source.

Representatives for Prime Group, Empire Capital, Artemis and L&L could not be immediately reached for comment. A Newmark team led by Adam Spies and Adam Doneger negotiated the deal.

The property’s steep drop in value is in part the result of losing its major tenant, WeWork. The co-working company took 60,000 square feet in 2018, the majority of the building’s roughly 96,000 square feet.

WeWork shuttered its Ironworks location last year as part of its bankruptcy restructuring. It appears the building is now completely vacant, as all of the space is listed as available on its website.

It was once unthinkable that such a building in a prime location like West Chelsea would be used for anything but office, let alone something as unglamorous as storage. But with office values so depressed, owners are looking to get creative.

In the Garment District, a joint venture between Fred Leffel’s Flatiron Equities and self-storage developer Mequity Companies paid about $24 million in September to buy an office building they plan to convert into a 16-story Manhattan Mini Storage.

Prime Group, headquartered in Saratoga Springs, announced in June that it had acquired 30 self-storage properties totaling about 1.7 million rentable square feet across 10 states.

Empire Capital, meanwhile, has been buying distressed office properties, though not every deal has worked out. Empire’s Rahmani and Khalili led a deal with other investors in 2022 to buy the 40-story office building at 1330 Sixth Avenue for $320 million.

Empire and frequent partner Igal Namdar’s Namdar Realty Group bought an office building at 345 Seventh Avenue for $107 million in 2021, but this summer they were in talks to hand it over to their lender.